Ray Otero, a New Yorker, wanted to get rich but he didn’t want to spend his days working. So he spent 500-700 dellars a week on the state lottery. He believes that he is going to win eventually and able to move back home to Puerto Rico.

Spending huge amounts of money on lottery isn’t a very effective way of getting rich. Chances are that you end up losing all the money you spend. Instead, you should consider investing your money and you should start doing it right now.

Why now? The answer is the compound interest which is said to be the eight wonder of the modern world. The earlier you start the richer you get. And nothing beats an early start.

Let’s imagine that you start investing money when you are 20 years old. You invest 200€ a month which makes 2400€ a year. The average rate of return you get is 7%. You keep investing 2400€ a year for 10 years and you stop investing when you turn 30. Now you just let compound interest do all the work. By the time you turn 65 and retire you have 356 700€. That’s pretty good considering you only invested 24 000€. And that’s more than your friend have who started investing 2400€ a year when he was 30. Although he didn’t stop investing until he was 65 he has made only 333 000€.

That’s how important it is to start early.

So how to save money for investing? Saving money in your 20s is not going to be easy if you are studying. But you should try to save some money. If you can’t save the 200€ a month as mentioned earlier try to save 100€ or 50€.

Keep track of your spending. Do you really need a car? Could you buy used clothes or furniture instead of new ones? Plan ahead your weekly menu and buy your groceries according to that.

The most important thing is to start saving money early. The retirement may sound like a distant future when you’re young but it is worth investing in.